In this paper, we propose an efficient algorithm for encoding of MPEG-4 simple profile. In the proposed algorithm, I frame encoding adopts all phase biorthogonal transform (APBT); for P frames, each frame puts the reconstructed frame of previous coded one as the reference frame to perform motion estimation (ME) and motion compensation (MC), and then the encoding of residual frame uses discrete cosine transform (DCT). While the proposed algorithm applying on MPEG-4, the objective effect and visual quality of reconstructed video sequence are approximate to the one based on DCT at the same bit rates. But the advantage is that the APBT transform coefficients can be quantized uniformly. Therefore the computing time is shorted and hardware implementation becomes easier. The proposed algorithm uses low computational complexity to make it applicable to encoding of MPEG-4 simple profile.